Insoluble insolvency is a concept coined by Jim Tozzi via the Center for Regulatory Effectiveness (CRE) to describe a state where a government’s long-term fiscal obligations cannot be solved by conventional remedies, such as taxes, borrowing, or economic growth. It implies a, mathematically and politically, unsolvable system rather than a temporary financial shortfall.
TheCRE.comKey Concepts of Insoluble Insolvency
- Definition: Unlike structural insolvency—which can be repaired—insoluble insolvency suggests the system is beyond repair, leading to potential collapse or necessary fundamental redesign.
- Origin:
The term was formulated to describe US government debt and entitlement crises, such as Medicare and Social Security, that are considered legally and politically untouchable.
Contextual Application
- Sovereign Risk: It is used to analyze when a nation faces uncontrollable debt that traditional economic levers cannot fix.
- System Failure: The concept suggests that the “governing system itself” is no longer solvent.
TheCRE.com +2
- The History of “Insoluble Insolvency” » Public Participation
-
Unfunded entitlement liabilities. Demographic aging (Social Security, Medicare) Structural deficit financing. Political unwillingn…TheCRE.com
-
The United States in a State of Insoluble Insolvency
Congressional Constraints. Legislative gridlock reinforces the shift toward administrative solutions. Fiscal decisions are increas…
theCRE.com -
Realigning Fiscal Disorder Through Insoluble Insolvency
The highly advertised 3% of GDP program to control the ever growing national debt is either not enforceable or when if it becomes …
TheCRE.com
AI can make mistakes, so double-check responses
